chapter 5 market segmentation, targeting, and positioningmarket segmentation, targeting, and...
TRANSCRIPT
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Chapter 5
Market Segmentation,
Targeting, and Positioning
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Market Segmentation
Involves the division of a diverse market into a number of smaller submarkets that have common features.
The objective is to identify groups of potential customers with similar requirements.
Market segmentation provides a a commercially viable method of serving customer needs.
Segmentation is at the heart of strategic marketing.
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The Benefits of Market Segmentation
Enhanced
Profitability
Enhanced
Opportunities
for Growth
Improved
Customer
Retention
More effective
targeting of
communications
Opportunities
of segment
dominance
Better matching
of customer
needs
© The McGraw-Hill Companies, 2009
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Garmin
Garmin
Unashamedly
targets female
buyers
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Segmenting Consumer Markets Consumer segmentation
Profile
Socio-economic
Demographic
Geographic
Personality
Lifestyle
Psychographic
Benefits sought
Purchase occasion
Purchase behaviour
Perceptions and beliefs
Usage
Behavioural
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Consumer Segmentation Methods Variables Examples
Behavioural
Benefits sought Convenience, status, performance
Purchase occasion Self-bay, gift, special occasions
Purchase Behaviour Brand loyal, brand switching, innovators
Usage Heavy, light
Media Behaviour Primarily online, primarily offline
Psychographic
Lifestyle Trendsetters, conservatives, sophisticates
Personality Conscientious, agreeable, extrovert
Profile
Age Under 12, 12-18, 19-25, 26-35, 36-49, 50-64, 65 and over
Gender Female, male
Life Cycle Young single, young couples, young parents, middle-aged empty-nesters, retired
Social class Upper middle, middle, skilled working
Terminal education age 16, 18, 21 years
Income Income breakdown according to study objectives and income levels per country
Geographic North vs south, urban vs rural, country
Geodemographic Upwardly mobile young families living larger owner-occupied houses, older people living in small houses, European regions based on language, income, age, profile and location.
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Benefits Sought
Patek Philippe uses powerful emotional appeal to convey the benefits of ownership
of a luxury watch .
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The ACORN Targeting Classification
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Segmenting Organisational Markets
Organisational segmentation
Purchasing
organisation Choice
Criteria Geographic
location
Industry Organisational
size
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Five Criteria for Successful Segmentation
1. Effective
2. Measurable
3. Accessible
4. Actionable
5. Profitable
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Target Marketing Strategies
Customised Marketing
Differentiated Marketing
Undifferentiated Marketing
Target Marketing
Strategies Focused Marketing
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Target Marketing Strategies
Undifferentiated marketing
Marketing mix Whole market
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© The McGraw-Hill Companies, 2009
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Example of Undifferentiated Strategy
ORGANISATION MARKETING MIX TARGET MARKET
Everybody
• Price
• Promotion
• Product
• Distribution
Post
Office
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Target Marketing Strategies
Differentiated marketing
Marketing mix 1
Marketing mix 2
Marketing mix 3
Segment 1
Segment 2
Segment 3
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Example of Differentiated Strategy
Marketing
Mix 1
Marketing
Mix 2
Marketing
Mix 5
Marketing
Mix 3
Marketing
Mix 4
Arcadia
Group
Miss
Selfridges
18- 24 age group
Dorothy
Perkins
20s & 30s
Evans
Size 16+
Outfit
Out of town
convenience
Wallis
30 plus
age group
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Target Marketing Strategies
Focused marketing
Segment 1
Segment 2
Segment 3
Marketing mix
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Example of Focused Strategy
ORGANISATION MARKETING
MIX
Upmarket
consumers
Price
conscious
consumers
Value
seekers
Bang &
Olufsen
Music
systems
• Price
• Promotion
• Product
• Distribution
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Target Marketing Strategies
Customised marketing
Marketing mix 1
Marketing mix 2
Marketing mix 3
Customer 1
Customer 2
Customer 3
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Example of Customised Strategy
INDIVIDUAL
MIXES ORGANISATION INDIVIDUAL
CUSTOMERS
Industrial
Electronic
Systems
Supplier
Marketing Mix 1
Marketing
Mix 2
Marketing
Mix 3
Marketing Mix 4
Nissan
Birdseye
Heinz
Mercedes
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Positioning….
‘....is the act of designing the company’s
offering so that is occupies a meaningful and
distinct position in the target consumers mind’
Effective positioning is the act of linking
products and services to the solutions
that customers seek.
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Panasonic Lumix Camera
This advertisement
for Lumix digital
cameras powerfully
illustrates its core
value proposition
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Coke Zero
Diet Coke and
Coke Zero: virtually
identical drinks that
are positioned
very differently
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Keys to Successful Positioning
Credibility
Clarity Consistency
Competitiveness
Successful positioning
A Perceptual Map of Supermarkets
A
B
C
D
X
G
E
F
High price
Low price
Narrow product range
Wide product range
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Repositioning Strategies
Image
repositioning
Product
repositioning
Intangible
repositioning
Tangible
repositioning
Same Different
Same
Different
Target
market
Product
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Chapter Summary The process of market segmentation is based on the principle that not all customers have the same needs.
They are many different variables which can be used for segmenting consumer and industrial markets.
The 5 criteria for successful segmentation are: effective, measurable, accessible, actionable and profitable.
There are 4 generic target marketing strategies: undifferentiated, differentiated, focus and customised marketing.
Positioning is the key tool for conveying how companies meet customer needs with products and services.
There are 4 repositioning strategies: image, product, intangible and tangible repositioning .
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The Best Drink Created
Worldwide
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Background Founded: June 16, 1903
Founder: Caleb Bradham
Global Brands:
Pepsi Quaker
Lays Tropicana
Gatorade
Competitor: Coca cola
Cooperator: Kentucky
Fried Chicken
Embrace your past, but live for now.
Slogan:
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Our Mission
As one of the largest food and beverage companies in
the world, our mission is to provide consumers around
the world with delicious, affordable, convenient and
complementary foods and beverages from wholesome
breakfasts to healthy and fun daytime snacks and
beverages to evening treats. We are committed to
investing in our people, our company and the
communities where we operate to help position the
company for long-term, sustainable growth.
Our Vision
At PepsiCo, we aim to deliver top-tier financial performance
over the long term by integrating sustainability into our
business strategy, leaving a positive imprint on society and the
environment.
We call this Performance with Purpose.
Our Vision
At PepsiCo, we aim to deliver top-tier financial
performance over the long term by integrating
sustainability into our business strategy, leaving a positive
imprint on society and the environment.
We call this Performance with Purpose.
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Over 100 Years of Fun and
Refreshment. Pepsi is one of the world's most iconic and recognized consumer brands globally. Today, the Pepsi portfolio includes three products - Pepsi, Diet Pepsi and Pepsi MAX — that each generates more than $1 billion in annual retail sales.
Good Fun Frito-Lay snack brands balance our product portfolio, blending 'good fun' with high-quality, great tasting snacks. Its portfolio includes flagship brands - LAY'S® potato chips, the No. 1 snack food brand in America, and FRITOS® corn chips, a snack fans have enjoyed for more than eight decades - among many other favorites.
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Performance
Gatorade's line of sports
fuels adds over 45 years of
sports nutrition research to
the PepsiCo portfolio in
more than 80 countries.
Gatorade has a rich history
of studying the best
athletes in the world, in the
lab and on the field, and no
one knows their fueling
needs better.
Nourishment You Can Trust
Quaker, one of the most trusted
food brands for more than 135
years, includes a portfolio with a
wide range of nourishing and
delicious meal and snack choices
that help fuel healthy families.
Holding leadership positions in their
respective categories, Quaker®
Oats, Quaker® Rice Cakes and
Quaker® Chewy® Granola Bars are
consumer favorites. Quaker also
produces popular cold cereals like
Quaker® Life® Cereal and Cap'n
Crunch® , iconic Rice-A-Roni side
dishes and beloved Aunt Jemima®
pancake syrups and mixes.
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The Fruit Juice Leader
Tropicana is one of the leading
producers and marketers of
branded fruit juices. With
innovations like Tropicana
Farmstand, juice that has one
serving of fruit and one serving
of vegetables in every glass,
and Trop 50, with 50 percent
less sugar and calories,
Tropicana has a diverse good-
for-you portfolio of delicious
and nutritious drinks that are
enjoyed all day long.
Brand’ s
Performance
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Continue to refine our food and beverage choices to meet changing consumer needs by reducing sodium, added sugars and saturated fats, and developing a broader portfolio of product choices.
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Help protect and
conserve global
water supplies,
especially in water-
stressed areas,
and provide
access to safe
water
Create a safe, healthy,
diverse and inclusive
workplace that reflects
the global communities
in which we operate
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PEPSI CO:
Advertisement
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PEPSI CO: Marketing Mix
Product
Beverage Products – Diet
Pepsi, Gatorade, Mountain Dew,
Thirst Quencher, Tropicana,
Aquafina Bottled Water, Sierra
Mist.
Savory Food Snacks – Fritos
Corn chips, Cheetos, Ruffles
Potato Chips, Lays Potato
Chips, Tostitos, Doritos.
Other Food Products –
breakfast cereals, cakes and
cake mixes.
PepsiCo recently created
Baked Snacks North America
Business Unit to meet
consumer’s interest in more
nutritious snacks and foods.
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Price
Expenses related to transportation, ingredients and labor
continue to pressure the beverage industry toward price
increases.
PepsiCo’s drink pricing strategies may be heavily
influenced by its working relationship with Wal-Mart whose
low price themes put pressure on PepsiCo to hold down
prices.
The company strives to cut or maintain current prices by
cutting overhead and re-engineering the manufacturing
process.
PepsiCo is expanding its use of inexpensive and
recyclable plastic bottles; nevertheless the company has
instituted some price increases in recent years, specifically
in its overseas markets such as New Delhi and Duba.
Place
PepsiCo is primarily a US based
company with approximately 52% of
its revenues located in the states.
PepsiCo is in the midst of making a
$1, 000 million investment in China,
and a $500 million investment in
India. Both initiatives are part of its
expansion into international markets
and a lessening of its dependence on
US sales.
In addition the company plans on
major capital initiatives in Brazil and
Mexico.
The company is also acquiring
Russia’s leading Juice Company,
Lebedyansky, and V Water located in
the United Kingdom.
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Promotion
PepsiCo instituted a so called Pepsi Stuff promotion whereby customers could accumulate Pepsi Points from buying various products these points could be used to by other products, most recently AmazonMP3. A recent promotion involving the NY Yankees was not well received when not enough free tickets were made available. In 2008 PepsiCo employed Tiger Woods to promote a Gatorade brand called Gatorade Tiger. PepsiCo continues is promotional association with the NFL and the Super Bowl specifically marketing Pepsi and Doritos. In 2009 Pepsi launched its “Pepsi Throwback” campaigned offering a drink with the sugar content of its original product.
Competitor:
Coca cola
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Taste the feeling
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Founded : 1886; 130 years ago
Founder: Asa Griggs Candler
Headquarter:
Atlanta, Georgia, United States
Competitor: PepsiCo
Slogan: Taste the feeling
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Brands
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Coca-Cola Coca-Cola is the
most popular and
biggest-selling soft
drink in history, as
well as one of the
most recognizable
brands in the world.
Sprite Introduced in 1961, Sprite
is the world's leading
lemon-lime flavored soft
drink. Sprite is sold in more
than 190 countries and
ranks as the No. 3 soft
drink worldwide.
Fanta Introduced in 1940, Fanta is the second
oldest brand of The Coca-
Cola Company and our second largest
brand outside the US. Fanta Orange is
the leading flavor but almost every fruit
grown is available as a Fanta flavor
somewhere. Consumed more than 130
million times every day around the
world, consumers love Fanta for its
great, fruity taste.
Diet Coke
Diet Coke, also known as Coca-Cola light in
some markets, is a sugar- and calorie-free
soft drink. Diet Coke/Coca-Cola light is one
of the largest and most successful brands of
The Coca-Cola Company, available in more
than 150 markets around the world.
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Coca-Cola Zero
Coke Zero was Coca-Cola's largest product
launch in 22 years and launched in 2005,
reaching billion-dollar status in 2007. Coca-
Cola Zero offers great Coke taste, uplifting
refreshment and zero sugar.
Coke-Style
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At London Fashion Week,
where the duo debuted their
Autumn Winter 2016
collection, Coca-Cola made a
striking appearance among
the new designs, which
featured vintage "bathing
beauties" ads and the
iconic Coca-Cola bottle.
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Brand’s
Sustainability
ME, WE, WORLD
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COCA-COLA’S
Advertisements
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Product
Coca-Cola is the leading provider of soft drinks
in the world. In 2010, it not only had the No. 1
selling soda with regular Coke, but its Diet
Coke brand outpaced Pepsi for second billing.
Within the pop category, Coca-Cola has a
number of brand variants, including Dr Pepper
and Sprite. The company also produces fruit
juices and sports drinks. Emphasis on the soft
drink industry, though, has contributed to
Coca-Cola's ability to distinguish itself as a
quality provider.
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Place
Coca-Cola's distribution process
is a key element of its offering.
The company's products are
available in cans and bottles in
supermarkets and other retail
stores around the world.
Additionally, the company
provides supplies for fountain
drinks in many restaurants. It
sells its products in thousands of
pop vending machines placed
in businesses and public
buildings. The ease and
convenience of getting to the
product is important to customer
loyalty.
Price
The long-term pricing strategy of Coca-Cola can be best
described as value oriented. Despite being a leader in its
industry, its fierce rivalry with Pepsi has forced Coca-Cola to
maintain affordable price points to appeal to its vast middle
class market. The company was criticized by shareholders
and analysts in 2011 for maintaining relatively low
price points in response to economic recession in the United
States. While this point emphasizes the risks to any
company of adopting a price-driven strategy, Coca-Cola's
strong global brand allows for brief periods of price drops.
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Promotion
Coca-Cola invests billions of dollars
a year in advertising and promotions
around the world to maintain its
position of industry leadership
against rival Pepsi. Pepsi increased
its TV ad budget by 30 percent in
2011 when it fell behind Diet Coke.
Coca-Cola spends a good portion of
its ad budget on television
advertising. It has used polar bear
characters and a message of
nostalgia and tradition as part of its
branding over time. Magazine ads,
online and social media have also
been used as media for Coca-Cola
marketing. Sales promotions at the
store are used to drive revenue
during slow periods.
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Coke is targeting international growth;
Pepsi is growing its snack business.
And both are going head-to-head in the
rapidly expanding bottled-water
business.
Pepsi's Aquafina is beating Coke's
Dasani in the water wars.
Diet Coke vs. Diet Pepsi; Sprite vs, Mountain
Dew; Nestea vs. Lipton, Tropicana vs.
Minutemaid. And the list goes on.
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Some 60 percent of PepsiCo’s profits
come from its snack business. From
Fritos to Lays to Cracker Jacks and
Tostitos, Pepsi has a virtual
monopoly, with no competition from
Coke.
Coke, meanwhile, just scored a big coup
by winning the soft-drink business at
Subway, a fast-food chain now bigger than
McDonald's, that had previously served
only Pepsi.
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